Former Julius Baer Worker Sentenced To Three Years' Jail For Data Theft

Stephen Little Reporter London 27 August 2013

Former Julius Baer Worker Sentenced To Three Years' Jail For Data Theft

A Swiss court has sentenced a former IT contractor at Zurich-based private bank Julius Baer to three years in prison after being found guilty of stealing and selling information on the Swiss bank's clients.

Lutz Otte, a 54-year-old German national, was found guilty by the Federal Criminal Court in Bellinzona of economic espionage, money laundering and breaches of banking secrecy.

After agreeing a plea deal with prosecutors, Otte pleaded guilty in return for a three-year sentence, half of which was suspended.

Otte confessed to collecting data about wealthy German and Dutch clients with account holdings of more than €100,000 ($133,529) between October and December 2011 and then selling it on to German tax authorities via a retired German tax inspector.

The data stolen included client names, bank account information, residences and amounts held in the bank.

The issue was widely reported last August when chief executive of Julius Baer Boris Collardi went public about the data theft in a news interview.

Julius Baer declined to comment when contacted by this publication.

The development comes at a time when Swiss banks are facing increased international pressure to lift bank secrecy laws which overseas governments say enable the wealthy to avoid paying tax in their resident countries.

The data theft at Julius Baer highlights the tension between the Alpine nation and a number of other European countries, notably Germany, the US and France, regarding the use of stolen data in tax investigations.

German authorities have used stolen information in a number of cases, raising concerns about whether countries using stolen data are abusing due process of law and compromising legitimate client privacy.

Earlier this month, Switzerland said it may cooperate with other countries trying to clamp down on tax dodgers even if requests for help are based on leaked Swiss bank data from paid informants.

However, the Swiss government insisted that it will not cooperate with foreign governments if data on account holders has been directly stolen or if governments have ordered such information to be stolen.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes